Court Says Patent Marking Law Is Unconstitutional; Expired Patent Trolls May Be Put Out Of Business

from the patent-marking dept

We've been covering the various lawsuits and legal questions surrounding false marking or false patent marking over the last year. You can read the link above for details, but the short version is that patent law says you can't say something is patented when it is not -- and that includes items whose patent has expired. That all makes some amount of sense, especially considering the goal should be that once something goes off patents, others shouldn't be afraid to use it. However, the law also added a provision that lets anyone (yes, anyone) bring a false marking lawsuit -- so long as they split the proceeds with the US government. The goal here was to give private actors incentive to enforce this law, since the feds knew quite well they'd mostly ignore it themselves.

The law had a liability limit of $500 for false marking. And therein lies a big problem, because that $500 is defined somewhat ambiguously, and it wasn't clear if, say, you made a bunch of ties and marked them with an expired patent, if you were liable for $500 total for the whole bunch... or were you liable for $500 for each individual tie that bore the mark? Not too long ago, a court ruled that it was for each individual item, rather than at the product line level... and that opened the floodgates, as various folks around the country just went in hunt of any product with an expired patent number they could sue for mega bucks. In one example, it was noted that this ruling made the total liability jump from $500 to $10 trillion.

I was somewhat conflicted about all of this. I agree that you shouldn't be able to falsely mark something as being patented, but it also seemed quite clear that this ruling and law were being abused not for any real consumer protection, but just to squeeze money out of manufacturers -- and that seemed problematic.

velox was the first to alert us to a ruling that said such false marking laws are unconstitutional, mainly because they hand over a function of the government (preventing false markings) to private citizens, noting that this violates the constitution in handing over criminal law issues to private actors. I imagine there will be appeals and other rulings on this issue, but from an initial quick read, this ruling seems to make sense. It doesn't make it legal to falsely mark a patent, but recognizes that this is a matter for the government to decide, not some private citizen.

Filed Under: patent marking, patents

Bagel Company Sued For Claiming It Had Patented Process For Making 'Brooklyn Water'

from the rolls-with-holes dept

Way back in high school, my after school/weekend job was working in a bagel shop in New York. I learned pretty much all aspects of the bagel business, and ever since then I take bagels pretty seriously -- including the well known fact that you just can't make good New York bagels outside of New York. Often, it's because bagel shops elsewhere take shortcuts in how they cook their bagels, but the key reason is, of course, the water. Making a bagel (properly) involves boiling the dough before cooking the bagel, and for whatever reason, only the water in New York seems to have that perfect quality that makes a bagel into a bagel. Since moving away to California, I've never been able to find anything that comes even close to a New York bagel, and instead have to settle for vastly inferior "rolls with holes," that people around here think are bagels.

So, this next lawsuit caught my attention not just because of the patent issues (the stuff that normally catches my attention), but also because it's about bagels and bagel water. Apparently, there's a company (based in Florida, not Brooklyn), called the Original Brooklyn Water Bagel Co., which claims to not just make New York-style bagels, but also to make its own "Brooklyn water," which is necessary for making such bagels, via a "14-step patented process." However, another Florida-based eatery, Mamma Mia's Trattoria is suing OBWB for false patent marking, saying the 14-step patented process is neither 14 steps nor patented: If you don't recall, we've had a few long and detailed posts about the issue of patent marking, which has gained a lot more interest lately, due to some recent rulings that have greatly expanded the potential damages for falsely claiming something is patented when it is not, while also making it easier for anyone (and we do mean anyone) to sue for false patent marking. In fact, because of this, a whole bunch of new patent marking lawsuits have been filed, leading many to feel the law is being abused. However, this story, if the details in the complaint are accurate, seems like exactly the sort of situation that a false marking law was designed to handle.

Mamma Mia points out how often OBWB points to its "patented process" in its marketing and advertising campaigns, suggesting some sort of proprietary and exclusive advantage. However, Mamma Mia notes, it does not appear that OBWB actually holds any patents whatsoever. Oops. OBWB's claim for its "patented process," apparently comes from the fact that it licensed a bunch of patents from another company -- Aquathin (also from Florida), which makes water filtration systems. When Mamma Mia demanded to know what patents were being used, OBWB listed out seven patents from Aquathin.

The only problem? Four of the seven patents are already expired. Of the remaining patents, two are actually design, not utility, patents (which is more like a trademark, and not what people think of when talking about a patent, as it's about the design of a product not any "process"). That leaves a single utility patent (which is close to expiring), but if you look at that actual patent (5,147,533), it's about how to mount a water purification system under a kitchen sink -- which has nothing to do with the process of purifying the water itself.

So, there doesn't appear to be any actual 14-step-patented process here. There may be a 14-step process, and who knows if it actually creates anything close to Brooklyn water, but the patent claim appears to be highly questionable, at best. Even so, Mamma Mia's complaint notes, OBWB still threatened to sue Mamma Mia for infringing on its (apparently non-existent) "patented process," in offering its own "New York-style" pizza.

If the allegations are true, this does seem like exactly what patent marking lawsuits were designed for: to prevent a company from falsely claiming a monopoly on something it has no right to. Of course, this means that if it's actually possible to create a process to replicate New York water (that doesn't involve, you know, bottling water from New York and shipping it around), and that process is not patented, then perhaps there's still hope that we'll be able to get "real" bagels in California...

Filed Under: bagels, false marking, marking, patent marking, patents, water
Companies: mamma mia, original brooklyn water bagel

New Industry Springs Up Overnight: Filing Patent Marking Suits Over False Patent Claims

from the patent-marking dept

A few years back, we wrote about some lawsuits that were filed against companies who were still listing expired patents on their products, implying that those products were still protected by the patents. The practice of claiming patent coverage over something that isn't patented is known as "patent marking," and it's become very popular lately. AdamR alerted us to the news that Activision was recently sued for patent marking, in listing out patents on certain games that don't cover what's in those games. But that's just the tip of the iceberg.

Joe Mullin points us to the news that, in just the past few months, it looks like a bunch of lawyers have started going around filing patent marking lawsuits. In at least some of these cases, totally different groups of lawyers have sued the exact same companies over the same patents.

What's going on?

Well, as we noted a few years back, there had been a few such cases filed under the law covering patent marking, and as they made there way through the courts, there was a question of how the penalties should be calculated. The law notes that anyone found to have been patent marking "Shall be fined not more than $500 for every such offense." But, if you were selling products -- say Solo plastic cup lids (which one such case is about) -- is that $500 fine for all the lids (considering all the cups with the marking together to be a "single offense") or does each cup lid constitute a separate offense? Clearly, the difference matters in a big way.

Without going into all the details, an appeals court ruled, at the end of last year, that the $500 should apply to each item, rather than to the product as a whole -- massively increasing the liability for false marking. This particular ruling, the Forest Group ruling, applied to construction stilts, and greatly increased the liability -- but in some of the other cases, the difference is even more striking. As some have noted, with Solo cups lids, there are supposedly 21 billion (with a b) cup lids with the allegedly falsely marked patent out there, meaning that a ruling like the one in Forest Group, if applied to Solo, turns a $500 liability into a $10 trillion liability.

That's real money.

And here's the next part of the law that makes things tricky. Unlike many court cases, anyone is allowed to bring a patent marking case. Yes, anyone. You just have to split the award with the US government. As the law notes:

Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

So, with the Forest Group ruling last year, suddenly a bunch of lawyers realized that there could be good money in finding anyone with a falsely marked patent -- especially if it's on a consumer product of which there are tons in the market. Hence the sudden rush of patent marking cases, including duplicate suits against the same companies over the same patents.

There are some concerns, obviously, that this is a dangerous situation, with a bunch of lawyers basically scouring the country for anything marked with a patent that might be expired or doesn't cover the product in question. In fact, I've seen some start calling them "patent marking trolls," playing off of the "patent troll" concept. But, at the same time, as with copyfraud, falsely claiming a gov't granted monopoly right over something that is not protected is a pretty serious problem -- and a law that makes it profitable to punish such an abuse seems like it should be a good thing. Now, if there were only a similar setup for copyrights...

Filed Under: patent marking, patents